Regardless of business size the quantity of the stock carried, inventory accuracy must be ensured at all times.

Customers turn red with anger when their orders are not fulfilled on time. Inside salespeople struggle to push orders down
the pipeline when there is no inventory to mark their requisitions against. Production comes to a standstill or at least slows
down to snail pace when inventory is not available in sufficient quantities.

Inventory accuracy is not a feel-good option, but a business mandate that businesses cannot take for granted.

There is a popular saying among manufacturers, “Inventory is money sitting in another form.” Having an accurate track of inventory is
as important as having an accurate track of your business finances.

Inventory management and profitability have a direct relationship. In fact, the gross profit from trading and manufacturing activities of
a business is reliant on the value of inventory. Even a slight variation can impact the bottom line of the business.

Hence, the inevitable need to ensure inventory accuracy at all times. It has some great benefits too, which are outlined below:

Strengthens Working Capital

Working capital is the total funds required to run the day-to-day affairs of the business. From paying immediate liabilities to procuring inventory for
production, working capital is critical to the business solvency of a business. Inventory accuracy ensures that the business has a pulse on its inventory
levels at all times. This helps make accurate forecasts for inventory procurement. Eliminating unnecessary purchases helps save more funds to be spent for
other business requirements. A positive working capital adds to the overall financial health of the business.

Avoids inventory pitfalls

Stockout and deadstock pile up are two common inventory management pitfalls that every manufacturer or business that deals with inventory falls into. Poor inventory
management or rather inadequate information about real-time stock levels is what leads to these pitfalls. Maintaining proper inventory records and ensuring
its access by all stakeholders is the ideal way to avoid such pitfalls.

Ensures timely re-ordering

Accurate inventory levels help the business know when it is time to reorder fresh supplies or stop procurement in case maximum stock levels are achieved. Without accurate
inventory information, the business would not be able to make calculated purchases. In the long-run, it would inflate the inventory procurement costs as each order
carries order processing, carriage octroi, carriage and ancillary costs.

How to ensure Inventory Accuracy

Now that we have seen the benefits of inventory accuracy, it is necessary to know how these benefits can be achieved. Most of these benefits are low-hanging fruits,
which can be gained with some moderate tweaks in the inventory management process.

Record all material movement

Right from the moment the stock enters the warehouse and all throughout its journey within the warehouse, all movements must be recorded. Traditionally, inventory movement
was recorded using stock ledgers, which had separate columns for open balances, receipts, issues and closing balances. In today’s digitized environment, this task is made
simpler thanks to RFID embedded bins or cloud-based systems that give real-time inventory information. You can opt any of these systems, but ensure material movement is recorded at all times.

Use a bin system to maintain inventory count

In warehouses and in retail shop floors, each inventory SKU would be assigned a bin. The bin usually carries a bin card where that specific SKU’s stock ledger is maintained. If this bin card system
is followed on a consistent basis, inventory accuracy can be ensured at all levels. The bin card is the original document from which final inventory records are compiled.
Hence, fixing it first fixes rest of the inventory accuracy problems.

Conduct sample-based physical inventory count

Experts suggest taking frequent physical inventory counts to tally differences between physical stock and book stock. But, for a business that has multiple warehouses
spread across a region, and each warehouse spanning into the size of several football grounds put together, conducting a physical stock-taking exercise can be difficult.
An ideal way to do it is to ensure inventory accuracy would be through:

Geographic location : Conduct stock-taking for each location, one at a time

Rank-based selection : Conduct stock-taking for products that are fast movers or high value

Parting Thoughts

Inventory is the lifeline that makes or breaks business profitability. Without accurate information about inventory levels, a business cannot manage to run its show efficiently. Inaccurate inventory
information will lead to wrong planning and forecasting, which would impact operations negatively.

While ensuring inventory accuracy can be a tough job, the processes and policies above will help ensure inventory accuracy throughout the supply chain.

To know more about MAI's expertise in contact center and fulfillment services, please drop in an email now!

Company Address

Client TESTIMONIALS

"The Bridgestone Firestone purchase resale program was initiated in 2000. The main objective of the program was to provide automotive dealerships, muffler and brake shops and general service stations with the support tools they needed to sell Bridgestone Firestone tires to end users."
- Bridgestone Americas

"We rely on MAI, an established provider of call center and fulfillment services, to deliver efficient service and unparalleled customer satisfaction. MAI has proven to be an excellent outsourced solution and a true business partner. The company’s background in marketing communications and brand support ensures we are being represented at the highest level possible."
- Tim Holody, Seta Corporation

"MAI recently completed its fifth season as Figi’s outsourced call center partner. We have gained incremental efficiencies year-over-year with regard to the program ramp up – not only from a human resources perspective, but from a technology and telephony standpoint as well."
Darcy Tudor, VP & Program Manager, MAI - Figi’s Gifts in Good Taste

"MAI developed, produced and monitored a direct mail initiative on behalf of ColeTaylorBank which has served the needs of Chicago area business for more than seven decades. The program achieved a 1% response rate and resulted in a sizable new account win, as well as valuable exposure to a group of highly targeted prospects."
- Cole Taylor Bank

"MAI had the I-PASS customer service/transponder fulfillment program up and running in half the time originally projected for start up. Within 90 days, call volumes increased 250% in response to a planned increase in tolls for customers without I-PASS transponders. Because MAI built the program for scalability, the increased demands were quickly taken in stride."
- Illinois Tollway Authority

"The information collected was invaluable in developing an advertising campaign that exposed the realities of the issues surrounding the‘health services’ provided by Planned Parenthood. I had the opportunityto monitor the survey calls on several occasions and was impressed with the Marketing Alternatives staff members assigned to our project. The interviewers were polite, respectful and very professional."
- Steven Brody, Executive Director, Dubuque County Right to Life

"MAI has always provided good reporting and it just keeps getting better. My team loves it. The best part is, they realize the relevance and value of the information that is now available and it’s being used to strengthen and improve our business."
- Nancy Barbee,
Assistant Marketing Manager,
Domino Foods, Inc.

"Firestone Complete Auto Care customers enjoy the convenience of scheduling service appointments online thanks to MAI’s creative thinking and outstanding IT capabilities. Not only do customers enjoy a higher level of service, we are now able to identify – and resolve – store issues that have resulted in lost opportunities in the past."
- Jim Stahulak,
Manager, Database/Internet Marketing, Firestone

"Shipping product to customers quickly and accurately is a vital part of our business. MAI takes great care of all of our shipping needs, so I can focus on everything else that needs to be done. When we have a shipment with special requirements, we always know MAI will handle it without a problem."
- Christy Kaskey, Owner,
Kaskey Kids, Inc.

"MAI conceived, designed and produced the Mohawk Tile Bottega within-a-store program. From creative through warehousing, fulfillment and installation, MAI acted as a single-source partner to make this concept materialize into reality."
- Mark Lorberbaum, Mohawk Industries

"MAI’s flexibility was a contributing factor to Mustela’s success in growing its business in the U.S. and Canada. Their active and forward thinking saved time and money while fostering great relationships with our retail customers."
- Amie Youngs, Senior Logistics Manager, Mustela US

"Excellence is the standard at Standard Coffee and we expected no less from our partnership with MAI. We’ve heard only positive feedback about them from the Standard Direct customer base – they truly handle our business as if it was their own."
- Stanley W. Eilers, Standard Coffee

"The lead qualification program MAI put together for Wilsonart Flooring helped our sales team enormously with time management. By prioritizing the leads, salespeople could focus on the strongest opportunities which, in turn, helped close more sales."
- Tammy Weadock, Wilsonart Flooring

Subscribe for MAI Updates

If you would like to receive periodic news from MAI, please click here to subscribe to be added to our email distribution list.